Legal Definitions - assertory covenant

An assertory covenant is a formal promise or agreement within a legal document where one party declares or affirms that a particular fact or condition is true or will be true. It is a legally binding statement about an existing state of affairs or a future state that is guaranteed to occur. If the asserted fact turns out to be false, the party who made the covenant may face legal consequences for breach of contract.

Here are some examples illustrating assertory covenants:

• Real Estate Transaction: Imagine a contract for the sale of a commercial building. The seller includes a covenant stating that "the property is free from any undisclosed environmental hazards and complies with all current environmental regulations."

  Explanation: Here, the seller is making a legally binding declaration (an assertion) about the current environmental status of the property. This is an assertory covenant because it promises that a specific fact (no undisclosed hazards, regulatory compliance) is true at the time of the sale. If, after the sale, significant undisclosed environmental hazards are discovered, the buyer could claim a breach of this covenant.

• Business Acquisition Agreement: In an agreement to purchase a software company, the selling company includes a covenant stating that "all software code developed by the company is original and does not infringe upon any third-party copyrights or patents."

  Explanation: This is an assertory covenant because the seller is formally affirming a crucial fact about its core assets – the originality and legality of its software. This promise is legally binding. If it later comes to light that the software infringes on another company's intellectual property, the buyer would have grounds to pursue a claim for breach of this covenant, as the asserted fact was untrue.